AA Co delivers record $49.9m operating profit for full year, as global food service recovery continues

Jon Condon, 19/05/2022

AA Co managing director Hugh Killen

THE Australian Agricultural Co delivered an operating profit of just short of $50 million at its annual financial results release held this morning.

The $49.9 million result, for the year ended 31 March, is more than double the $24.4 million operating profit delivered the previous year – and represents the strongest net profit since the company publicly listed back in 2003. The result was attributed in part to improved margins on beef sales, aided by global recovery in the food service sector (hotels, restaurants, pubs, clubs and conferences). Reflecting this, the price per kilogram for meat sales last year ($18.74) was up 21 percent on the year before.

Operating cash flow was also well up, rising to $24.2m versus $18.4m last year, while statutory net profit after tax was $137m – more than three times the previous year’s $45.5m.

Helping underpin the full year result was a company announcement last week that following an independent valuation of its properties, asset value held by AA Co increased 28pc since this time last year.

Pastoral property and improvements valuations increased by $254.5m, while the value of AA Co’s cattle herd increased by $198.8m, year-on-year. Cattle value lifted from $537m a year earlier, to $736m in 2021-22, due to both higher valuer per head, and increased head-count.

Improvements in property and herd values contributed to net assets increasing to $1.36 billion and resulted in net tangible assets per share growing 30pc to $2.27 per share.

In a statement, AA Co said its focus on brand had helped underpin the rise in average meat sales price per kilogram. This offset a 14pc reduction in the volume of meat sold, as the company rebuilds its herd following the impacts of floods and droughts in prior years. The company’s Wylarah and Westholme Wagyu business now represented 83pc of AA Co’s branded meat sales.

Higher cattle sales margins also contributed to the favourable operating profit result.

Managing director Hugh Killen told an analysts briefing this morning that the result confirmed that the company’s commitment to investing in its brands and properties could produce positive financial results – even in a turbulent global operating environment.

Growth in key markets

Growth of AA Co’s beef brands was evidenced in key markets including North America which saw 56pc growth in branded meat sales revenue, with a 21pc increase in volume and a 35pc rise in average meat sales price per kilo in this region. The US market last financial year represented 26pc of AA Co beef sales, ‘other’ Asia (not including China) 42pc, China 8pc, and Europe and the Middle East 11pc. Australian sales accounted for 11pc of meat sales, down from 13pc a year earlier. Overall meat sales last year were worth $208.5m, up 4pc on the previous year.

Price and volume increases were driven by increased brand awareness, strategic allocation of product and the easing of COVID restrictions.

Growth in South Korea also remained a focus for AA Co, with improved in-store brand experience helped Darling Downs retain a leading Wagyu market share in South Korea’s premium retail marketplace during the year.

Asia and Australia experienced reduced volumes due to the reallocation of high-value cuts to other key markets. The average price per kilogram increased by 6pc and 7pc in each region respectively.

The recovery of food service was also a catalyst for growth in Europe and the Middle East. Volume in this region grew 18pc and meat sales price per kilo increased 23pc as customers began to dine out again.

Mr Killen said while the recovery of foodservice as COVID restrictions eased had been an important contributor to the results, it had allowed the company to realise the hard work implemented during the peak of the pandemic in improving brand awareness and in-market allocation.

Current Operating Environment

Global supply chains would continue to be impacted by increased geopolitical risk, AA Co told analysts this morning. This, along with rising inflationary pressures, would impact the cost of key inputs across the beef supply chain.

“AA Co’s focus on costs as well as strategic customer management, product allocation and growing brand awareness will help to manage through this uncertainty,” the company said.

“The strong rebound in food service as part of a post-COVID recovery, continues in key target markets.”

Sustainability objectives

In the financial year ended 31 March, AA Co released its sustainability framework, including five major commitments. Launched in November 2021, the framework was the a first of its kind for the Australian beef industry, the company said.

Work has begun on each of the commitments that were made alongside the framework’s launch – landscape carbon, natural capital, methane emissions reduction, animal health and welfare certification and the Wylarah Institute.

The company plans to provide a comprehensive framework and strategy update in July.


  • More detail will be added to this report later today, following the completion of the analyst briefing.



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  1. Ross Tuck, 20/09/2022

    What a great turnaround, but it would be nice to know what serious improvements to land and stock development which would increase the bottom line.

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